TaxTMI 
TaxTMI 
2026 (10) TMI 181
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....ssment order dated 29.03.2025 passed by the Assessing Officer (hereinafter referred to as "the AO") under section 143(3) of the Act for the assessment year 2023-24. 2. The grounds of appeal raised by the Assessee before us in the memorandum of appeal in Form No. 36 read as under: 1. In the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the addition of Rs. 20,67,120/- which was made by the learned AO by disallowing of long term capital loss on sale of car. 2. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing. 3. Briefly stated, the facts of the case are that the Assessee, an individual, filed her re....
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....der, reads as under: Accordingly, it is held that car was not a capital asset and so long term capital loss claimed by assessee on sale of car amounting to Rs. 20,67,120/- is hereby disallowed and added to income. 5. Before the AO, and thereafter before the learned CIT(A), the Assessee contended that the car was a capital asset. Her submission, as recorded in paragraph 6.1 of the assessment order, was as under: We would like to submit that the assessee is engaged in business of real estate and property development. In books of accounts the assessee is having closing stock of real estate was Rs. 5,13,31,304/-. The Mercedes Car was purchased by the assessee and no depreciation was claimed prior to sale of the car. Since i....
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....e Assessee had claimed neither depreciation nor any expenditure on the car, which, according to him, shows that the asset was held as a capital asset and not exploited in any business; and thirdly, that where no depreciation has been claimed, the loss on the sale of the asset must be treated as a long term capital loss. In support, the learned AR placed reliance on the decision of the Hon'ble Punjab & Haryana High Court in CIT v. Santosh Structural & Alloys Ltd. [2012] 20 taxmann.com 501 (P&H) and on the decision of the Hon'ble Madras High Court in Share Aids (P.) Ltd. v. ITO [2021] 124 taxmann.com 256 (Madras), and submitted that the disallowance of the long term capital loss of Rs 20,67,120 ought accordingly to be deleted. 8. The learn....
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....f art; 11. It is thus clear that movable property held for personal use by the assessee is a personal effect and stands excluded from the definition of a capital asset, save for the specified items such as jewellery and works of art, within which a motor car does not fall. The expression personal effects has been authoritatively construed by the Hon'ble Supreme Court in H.H. Maharaja Rana Hemant Singhji v. CIT [1976] 103 ITR 61 (SC), a matter arising from the State of Rajasthan, where it was held that the enumeration of the articles in the definition indicates that the Legislature intended to comprehend within personal effects only those articles which are "intimately and commonly used" by the assessee, that is to say, articles which are....
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.... Assessee as personal expenditure in her own computation of income, a position she reaffirmed in her reply dated 18.12.2024. Before the learned CIT(A) she further stated that there was no activity in the business, meaning thereby that the car was not put to any business use. These are not findings thrust upon the Assessee; they are her own admissions, and they lead to the conclusion that the car was held for her personal use. 13. The only circumstance urged to the contrary is that the car was reflected in the balance sheet under the head fixed assets. In our considered view, that circumstance does not advance the Assessee's case. What section 2(14) of the Act looks to is whether the movable property is held for personal use, and not the ....
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....Act. 15. Nor does the circumstance that the Assessee claimed neither depreciation nor any expenditure on the car assist her case; if anything, it tells against her. In Santosh Structural (supra) and Share Aids (supra) the assets were admittedly business assets, and the absence or presence of a depreciation claim went only to the mode of computation. Here, by contrast, the Assessee did not merely omit to claim depreciation; she affirmatively disallowed the entire car related expenditure as personal in her own computation and stated that there was no business activity, so that the car was not used for any business. The very facts on which the learned AR relies are, therefore, the facts that establish that the car was held for personal use ....